NEW DELHI, Sept. 3 -- Restaurant tables are emptier, but delivery bikes are busier, as India's middle class cuts back on dining out despite easing inflation and rising confidence.

The shift points to a deeper strain on discretionary spending. While wealthier consumers continue to frequent fine-dining establishments, middle-class households are becoming more cautious with their money. As a result, many quick-service restaurants (QSRs) are rethinking their business models and leaning harder on delivery.

With the exception of Jubilant FoodWorks' Domino's, most large QSRs flagged slowing dine-in demand in the June quarter, even as delivery remained resilient.

Among QSR stocks, Jubilant was an outperformer thanks to its delivery moat, broke...